Vietnam reaping benefits from APEC membership

By Ha Phuong   February 22, 2017 | 02:24 pm GMT+7
Why it's important for the country to belong to the 21-member community, which makes up half of the global economy
Vietnam reaping benefits from APEC membership

The 21 members of the Asia-Pacific Economic Community (APEC) accounted for 54 percent of the world’s total GDP, 41 percent of the world's population and 44 percent of global trade by the end of 2016.

Vietnam’s trade in goods with APEC countries totaled $146 billion in 2016, accounting for over 40 percent of the country's total trade. Notably, Vietnam recorded trade surpluses with 11 of its 20 fellow members. The country ran its highest deficit with China.

This year Vietnam will host the APEC 2017 meetings, giving domestic companies more opportunities to connect more with APEC partners, said Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry.

Trade may become tougher now the Trans-Pacific Partnership (TPP) trade pact has been ditched by U.S. President Donald Trump, but all members of that deal are also part of APEC. The TPP may have tanked, but APEC is still there.

“APEC is not a legally-binding institution like the TPP. We [APEC members] still expect some of those [agreements] will happen with the work program for the free trade area for Asia and Pacific,” said Alan Bollard, Executive Director of the APEC Secretariat at APEC 2016 in Lima, Peru.

APEC members: dominant investors and generous donors

In 2016, newly registered foreign direct investment (FDI) from APEC members made up over 80 percent of the total registered in Vietnam, with South Korea and Singapore leading the pack. Investment in the country was led by the manufacturing, wholesale trade and finance/insurance sectors.

The number of licensed projects signed by foreign investors the first time Vietnam hosted the APEC meetings in 2006 hit 635, official statistics show. That figure has tripled over the last decade.

“APEC 2006 was nothing short of a miracle for trade and investment activities in Vietnam, changing the country for the better and becoming the basis for Vietnam to attract more investments from APEC members,” said Truong Dinh Tuyen, former Minister of Trade.

FDI projects from APEC countries run by global giants such as Samsung (South Korea), Intel (U.S.), Honda (Japan) and Sembcorp (Singapore) are also key players in Vietnam’s socio-economic development.

APEC members, especially Japan, South Korea and Australia, are among the most generous donors to Vietnam when it comes to foreign aid. Half of the official development assistance flowing into Vietnam came from APEC in 2015.

Vietnam’s tourism sector seems to have also enjoyed the benefits during the two decades the country has been a member of APEC. After successfully hosting APEC 2006, Vietnam' tourism revenue has risen from $2.24 billion in 2006 to a record of $17.5 billion in 2016. By 2025, APEC economies plan to attract a combined 800 million international tourists. China has been Vietnam's main source of international tourists for the past 12 years.

APEC 2017 will be the first APEC meeting for United States President Donald Trump and New Zealand Prime Minister Bill English since their recent inaugurations. They will attend APEC Economic Leaders' Meeting in Da Nang from November 5 to 11.

Experts believed APEC 2017 meetings provide an invaluable opportunity for Vietnam to raise its visibility in the international economic arena, and to advertise investment, trade, tourism and other economic opportunities to the rest of the world.

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